Rising in Europe’s outlook, rates remain No. 1 issue – 09/12/2022 at 07:50


The Euronext logo can be seen on a building in the La Défense district of Paris

PARIS (Reuters) – The main European stock markets are expected to rise on Monday in the wake of Wall Street and Tokyo, for a session that promises calm on the eve of inflation numbers in the United States, the need for strong- on interest in the news. Rate hikes remain the main concern of the markets.

The future contracts of the indices suggest an increase of 0.66% for the Dax in Frankfurt, 0.2% for the FTSE 100 in London and 0.59% for the EuroStoxx 50. As for the CAC 40 in Paris, it may amount to of 0.5% according to the first. applicable signs.

The day’s economic agenda was largely empty, apart from figures for British industrial production. But the main economic activity of the week is the publication on Tuesday of the monthly number of consumer prices (CPI) in the United States, which is expected to rise to 8.1% in a year in August after +8.5% in July.

These statistics will be followed closely because they will take place a week before the meeting of the Federal Open Market Committee (FOMC) of the Federal Reserve, some members of which do not hide their desire to continue the rapid increase in costs . on credit.

On Friday, one of the governors of the US central bank, Christopher Waller, came out in favor of a “significant” rate increase, and the chairman of the St. Louis James Bullard argued in favor.

“These leaders explained the need for the FOMC to continue raising interest rates until they have clear evidence of slowing inflation,” Commonwealth strategist Joseph Capurso said in a note. Bank of Australia.

Assuming a 75 basis point hike on September 21 is now considered 91% likely according to CBOE’s FedWatch barometer.

In the euro zone, after the three-quarter rate increase announced on Thursday, several officials from the European Central Bank (ECB) also took advantage of the weekend to continue to plead in favor of a further marked tightening of next month.

The President of the Bundesbank, Joachim Nagel, further stated on a German radio that if the inflation curve does not begin to bend, “new clear measures must be followed”.

ON WALL STREET

The New York Stock Exchange ended higher on Friday, driven by technology and growth stocks, which benefited from renewed investor confidence after declining in recent weeks.

The Dow Jones Index gained 1.19%, or 377.19 points, to 32,151.71, the Standard & Poor’s 500 gained 61.23 points, or 1.53%, to 4,067.41 and the Nasdaq Composite rose 250.2.1.2.

During the week, the S&P-500 rose 3.65%, the Dow Jones 2.66% and the Nasdaq 4.14%, their first weekly increase since mid-August.

Index futures suggest an open close to breakeven.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index gained 1.06% less than an hour from the close after Wall Street on Friday, driven by large caps such as Fast Retailing (+1.95%) or Tokyo Electron (+1.12 %).

The values ​​of air transport and tourism also benefited from the information that the government plans to soon withdraw quotas on the arrival of foreign visitors to Japan.

In China, markets are closed for the Moon Festival, also known as the Mid-Autumn Festival.

CHANGES

The euro took full advantage of the weekend’s declarations by ECB officials in favor of a further sharp increase in interest rates: at 1.0084 dollars, it gained 0.45% after rising to 1.0130 , the highest level since August 18.

The dollar meanwhile posted a decline of 0.24% against a basket of benchmark currencies pending US inflation numbers.

RATE

US Treasuries yields were lower in Asia, at 3.3328% for ten-year bonds and 3.561% for two-year bonds.

On Friday, the latter reached its highest level in more than 14 years in the session at 3.575% after the statements of Fed officials.

wool

The oil market fell again after Friday’s rise of nearly 4%, with health restrictions in China and the prospect of continued interest rate hikes serving as excuses for profit-taking.

Brent fell 1.5% to 91.45 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.71% to 85.31 dollars.

(Written by Marc Angrand, with Kevin Buckland in Tokyo)

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